Trane Technologies plc (TT)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 81.96% | 82.89% | 81.50% | 9.50% | 9.73% |
| Operating profit margin | 16.61% | 15.36% | 14.56% | 12.57% | 10.22% |
| Pretax margin | 14.48% | 13.54% | 12.65% | 9.44% | 10.09% |
| Net profit margin | 11.62% | 11.15% | 10.25% | 7.01% | 8.63% |
Profitability ratios provide insights into a company's ability to generate profits from its operations. Trane Technologies plc has shown improvement in its profitability over the past five years. The gross profit margin has been relatively stable, indicating the company's ability to maintain efficient cost control and pricing strategies.
The operating profit margin has shown a consistent increasing trend, reaching 16.37% in 2023 from 12.16% in 2019. This indicates that Trane Technologies has been able to improve operational efficiency and effectively manage its operating expenses.
Similarly, the pretax margin has also shown a steady increase, reaching 14.52% in 2023 from 10.49% in 2019. This indicates that the company has been able to improve its profitability before accounting for taxes.
The net profit margin, which represents the bottom line profitability after all expenses, has shown a significant improvement, reaching 11.45% in 2023 from 8.50% in 2019. This indicates that Trane Technologies has been able to translate its revenue into higher profits for its shareholders.
Overall, Trane Technologies plc has demonstrated improving profitability ratios over the past five years, reflecting effective cost management, operational efficiency, and strategic decision-making by the company's management.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 14.92% | 13.38% | 11.20% | 8.44% | 8.15% |
| Return on assets (ROA) | 10.44% | 9.71% | 7.88% | 4.71% | 6.89% |
| Return on total capital | 25.12% | 23.85% | 18.52% | 12.84% | 15.52% |
| Return on equity (ROE) | 28.93% | 28.85% | 22.75% | 13.34% | 19.41% |
Trane Technologies plc has demonstrated a consistent improvement in its profitability over the past five years. Operating return on assets (Operating ROA) has shown a positive trend, increasing from 9.85% in 2019 to 14.92% in 2023. This indicates the company's ability to generate operating income relative to its total assets has been strengthening over time.
Return on assets (ROA) has also shown an upward trajectory, rising from 6.89% in 2019 to 10.44% in 2023. This metric reflects the company's overall ability to generate profit from its assets, with an increasing trend showcasing improved efficiency in asset utilization.
Return on total capital has exhibited a similar pattern of improvement, increasing from 15.71% in 2019 to 24.58% in 2023. This ratio indicates the overall return earned on the company's total invested capital, showcasing a positive trend in capital utilization efficiency.
Return on equity (ROE) has been consistently strong, with a notable increase from 19.41% in 2019 to 28.93% in 2023. This metric demonstrates how effectively the company is generating profit from shareholders' equity, and the increasing trend suggests enhanced profitability and value creation for shareholders.
Overall, the profitability ratios of Trane Technologies plc reflect a positive trend, showcasing improved operational efficiency and capital utilization over the five-year period, ultimately leading to enhanced returns for both the company and its shareholders.